IAPB Insights: Perspectives from Our Panel 

Welcome to the official insights hub for the International Advisory Panel on Biodiversity Credits (IAPB).

The challenge of halting and reversing biodiversity loss requires robust, innovative solutions. As the global conversation around nature credits evolves, clarity, expertise, and diverse perspectives are more critical than ever.

In this new series, we have invited our Panel members - leading global experts from science, finance, policy, and Indigenous communities - to share their unique insights and in-depth analysis. This forum serves as a direct line to the thought leaders who are navigating the complexities and shaping the future of effective, equitable, and high-integrity nature credit markets.

Here, you will find expert commentary, reflections on emerging challenges, and bold ideas for building a nature-positive economy. We invite you to explore their contributions.

 NatureIsUs – parodying an old toy brand. Nature is everywhere, we are part of it, and our global economy, and us, depend 100% on it remaining healthy and bountiful. Yet over centuries we have been neglectful or, worse still, exploitative of nature, resulting in its steady deterioration and more recently its precipitous collapse.

Better late than never, we hope – the last five short years have seen a remarkable surge in what has become known as ‘nature finance’, which works to integrate the value of nature into our financial and broader economic decisions. And, positively, we have made progress, on the science, on data, accounting, financial instruments, policies and financial regulations including actions to stem nature crime, and in steering and ramping up the sustainable bioeconomy – all including but well beyond classical environmental regulatory compliance.

And we have also made progress in establishing entirely new markets with the purpose of channelling more funds into nature restoration and conservation, enhancing the livelihoods of nature’s stewards, and shifting business behaviour towards nature-positive business models, products and services. We can call these, generically, ‘nature credit markets’, while recognising that these markets and what is traded go by many names.

The International Advisory Panel on Biodiversity Credits (IAPB) was established with the mission of shaping and scaling these markets in ways that would deliver positive nature and broader sustainable development outcomes. Shaping and catalysing these markets to purposeful scale involves many moving parts. Central to their success is creating the right enabling policy environment to allow for innovation and experimentation, standardisation and scale, fair rewards to all of those involved, and high-quality, trusted credits, markets and outcomes.

There is nothing better than examining actual practice in developing nature credit markets and forming some initial conclusions and learnings on that basis. To this end, the IAPB commissioned an assessment of existing government-led nature credit markets, with the goal of identifying lessons to guide ‘good policy’. We were pleasantly surprised at the sheer number of policy-led initiatives (at various stages of maturity) – no less than 19 national and subnational nature credit schemes have been or are in the process of being developed globally, from India, the US and Canada through to Niue and Brazil. These cases include many types of markets, some of which are focused on voluntary ‘contributions’ while other markets derive demand from statutory compensation schemes.

Additionally, we identified several “emerging initiatives”, essentially government-led frameworks which are still in the early stages of development, including in Misiones Province in Argentina, Chile, Grand-Est and Auvergne-Rhône-Alpes in France, Guyana, Peru, and Scotland. Some of these, such as the EU’s Roadmap towards Nature Credits, could be particularly large and influential – both inside the EU as well as elsewhere.

The study allowed for the development of a world-first set of market archetypes, illustrating the range of roles that government may play, broadly set across three archetypes:

·   “Principle driven”, where government takes on an enabling and/or regulatory role but leaves aspects of market administration to the private sector. This archetype includes government-led schemes in Canada, Japan, New Zealand, Niue, and Paraná State in Brazil;

·   “Shared governance”, where government provides regulatory oversight and management of some market functions, such as approving and publishing credit and transaction data. Examples of this archetype include government-led frameworks in Brazil, Colombia, France, Germany, and Jiangxi Province in China; and

·   “Centralised governance”, where government assumes responsibility for managing most market operations, sometimes through direct ownership or day-to-day management. Schemes belonging to this archetype – as in Australia, India, New South Wales and South Africa – involve the government as regulator, administrator and potentially even buyer or seller of credits.

One of the most contested questions raised about nature credit markets concerns who is going to pay for what i.e., where is the demand for credits going to come from? Specifically, there are concerns that international, cross-biome biodiversity offset markets could emerge as a primary source of demand, which the IAPB has rightly identified as being inappropriate. (A similar species of tree or even litre of water cannot be equivalent between biomes, say between northern Kenya and the Amazon or the Swiss Alps).

The evidence to date is encouraging. Analysis of government-led frameworks revealed that, in many cases, national and subnational compliance markets are already driving significant demand. Although best estimates of entirely voluntary (i.e., largely brand-enhancing) demand is in the low millions of dollars, in just two well-established national compliance markets the level of transacting credit volumes per year was worth approximately EUR 2.5 billion and USD 3.6 billion, respectively.

One part of the assessment compared practice to the principles laid out in the IAPB’s Framework, launched at CBD COP16 in Cali in November 2024. Positively, the comparison highlighted significant alignment in the intent and design of government-led schemes. For instance, adherence to the mitigation hierarchy and no net loss principles are well integrated into existing frameworks. Most governments also have existing or planned systems for credit issuance and tracking and publicly accessible registries with data on credits generated/sold/transacted. Unfortunately, the assessment was not able to determine the extent of actual alignment in practice, which is clearly an important question to address in future operational research.

Other principles set out in IAPB’s Framework, and approaches and standards proposed in related technical papers, were less apparent in the practice observed during the research. Notable was the lack of explicit measures to uphold Indigenous Peoples and local communities’ rights and ensure equitable benefit sharing. Explicit inclusion of free, prior and informed consent (FPIC) and respect for and approaches to dealing with data sovereignty were also conspicuously absent from many national and subnational approaches, effectively leaving such matters to be determined by voluntary practice.

The comparative assessment included extensive interviews with governments, representatives of Indigenous Peoples and local communities, and key experts, as well as a review of formal documentation. These interviews, while not providing an easily standardisable set of results, highlighted a number of perspectives, concerns and suggestions.

·   Sustained political leadership was critical not just to get schemes going but to ensure continued support through their maturation process, which would inevitably involve successes and failures along the way.

·   Strong coordination between local and national authorities emerged as a key consideration, to ensure that different branches of government with regulatory and administrative responsibilities work in a joined-up manner.

·   Securing long-term funding to support scheme implementation was vital, highlighting the tensions between market-based solutions that would be expected to become self-financing over time, and those wanting more philanthropic or state-funded approaches.

·   Data, land rights and equity were consistently raised as interconnected issues. Governments identified data gaps relating to land titling and land ownership, particularly beyond commercially owned property involving Indigenous Peoples and local communities, as a major obstacle. They also noted difficulties in implementing approaches that guaranteed like-for-like ecological equivalence.

Our review of policy-driven nature credit market initiatives was consciously backward-looking, focused on understanding and drawing lessons from what has been done to date. More than anything, it revealed simply how much is happening, much of which is just getting going. Secondly, it highlighted the need to dig deeper to understand outcomes as much as design and trading volumes. Thirdly, it reinforced the need for principles and eventually standards, to support comparative learning and ease policy action in advancing successful initiatives, and ultimately to compare progress. And lastly, it reminded us that the matter of rights and equity cannot be a plug-in to market design or a matter of voluntary action but needs to be built into the DNA of the way markets function and are governed.